Archive for the 'Retailers' Category

When Competing Policies Collide

It is a basic premise of business that good managers do not allow short-range tactics, taken in response to immediate contingencies, to derail long-range strategies. This principle came to mind when I read a story in this week’s BNA Product Safety and Liability Reporter. The story discussed efforts by Wal-Mart Stores Inc. to put in place initiatives to reduce the environmental impact of the products it makes and sells. The story made clear that these efforts by Wal-Mart, and lauded by environmental activists, will be felt throughout the supply chain.

What especially caught my eye was the following portion of the story:

“Wal-Mart’s other environmentally friendly initiatives include:

• working with suppliers to increase the use of recycled content and to make packaging more recyclable. . .”

When I read this, I could not help but think back to the CPSC’s decision back in 2011 mandating the lead content of children’s products not be above 100 parts per million. You will recall that Congress set the limit at 300 ppm but allowed us to lower it to 100 ppm unless that level was not technologically feasible. The Commission decided to require the lower level even though this would drive many manufacturers to substitute more expensive materials in their products and even though our staff could not point to specific safety benefits (higher costs and consumer choice were certainly not factors in our thinking, of course).

However, more to the point, the staff specifically stated that, at the 100 ppm level, recycled materials would not be able to be used in children’s products and that virgin materials would need to be substituted. This is not because recycled materials do not necessarily meet the 100 ppm level, but because the testing we also require would not be predictive of what was actually in the product. In other words, because recycled materials, by their nature, are not necessarily consistent throughout, something could test at 90 ppm in one spot (passing our standard) but test at 120 ppm in another (failing our standard).

It is so unfortunate that the agency made no effort to try to reconcile the competing public policies—public health and environmental sustainability–at work here.  It would not have been hard for us to keep a lead content ceiling in place that was appropriately protective of health and still accommodate the government-wide policy to increase our use of recyclables. Exceptions for certain products that must and should be made out of virgin materials could easily have been integrated into such a policy. The commission clearly had, and has, the authority to do this, but in its regulatory exuberance, short-term reactive thinking trumped long-term creative problem solving.

So, kudos to Wal-Mart and other companies for their efforts to find environmentally friendly ways to make and sell products. It’s too bad that we have put up an unnecessary hurdle to that effort. Instead we could have come up with a solution that would have reconciled the important public policies of health and environmental stewardship. I wish we would have at least tried.

In the Back Room or in the Open…

Where should policy be developed?

Recently, the Commission raised eyebrows around the product safety community by effecting what many see as a broad policy shift through two privately negotiated settlement agreements. Of course, I am referring to the issue of requiring all-inclusive compulsory compliance programs as a condition to settle alleged failure to report violations, using as a justification for this action the existence of past voluntary recalls. This blog is to bring you up to date on the state of play.

First, I had an exchange with my colleagues about our settlement with Kolcraft, where my colleagues insisted on adding the compulsory compliance program language at the last minute after an agreement had been reached between counsel for the company and the agency. I expressed my disagreement with the decision, while my colleagues jointly endorsed it. Second, mere weeks later, we approved a settlement with Williams-Sonoma that included the identical requirement. Though I voted to approve—on the basis that the company was well-represented and agreed of its own will—I still felt uneasy about using the enforcement vehicle for this apparent policy shift, undermining both the efficacy of the settlement and the legitimacy of the policy, which deserves public input. This began an “unusual” back-and-forth with one of my colleagues, with his statement, my supplemental statement, his supplemental statement, my further supplemental statement and so on, with the latest pingpong volley occurring today.

These settlements, the identical language they share, and the emerging policy they represent all demonstrate that this is an important issue. So important, in fact, that it’s a conversation we should be having more publicly and with more participants.

As I have stated many times, I fully support corporate compliance programs. They are one way a company can build a commitment to safety into all of its products. And there may be a role for CPSC in getting more companies to institute compliance programs, but, whatever that role is, it’s one we should play in public. If we are going to require them, we should not do that through privately negotiated settlement agreements but instead should engage the public in the conversation so that we fully understand the implications of this policy.

The whole purpose of a multi-member commission is to make sure various views are heard and rules are the product of engagement and discussion. So, let’s engage and discuss.

Making a List, Checking it Twice

As you get started on your holiday shopping this weekend–Black Friday and Cyber Monday are upon us–you’ll want to keep your eyes open for a lot of things: a great deal, that can’t-miss gift, a parking spot that isn’t in the next county. There are, however, some other things you’ll need to keep an eye out.

  •  Look out for drawstrings on children’s clothes. They can easily get caught in playground equipment, furniture, or other objects and pose an entrapment or strangulation hazard. Earlier this year, at my urging, CPSC found that neck drawstrings in children’s clothes sized 2T to 12 are substantial product hazards. They shouldn’t be on the shelves anymore. If they are, they certainly shouldn’t be on your children.
  •  When you’re choosing toys and clothes, make sure they’re age appropriate for the child. Working with CPSC and industry groups, manufacturers have gone to great lengths to decide the right age range for their products, and those should be noted right on the packaging. Look for the label and take it seriously.
  •  A big part of those ratings is choking hazards. Always remember one simple rule: If kids can put something in their mouths, they will. Make sure toys for younger children do not have small parts that can easily pop off or break off. Small magnets and tiny button batteries pose special hazards. If swallowed, magnets can stick together inside the body and injuries like punctured intestines or blood poisoning can result.  Button batteries, if swallowed, can also result in severe internal injuries. 
  •  If a new TV is on your list, look for a good, safe place to put it. Children have been injured and killed from TVs tipping over and falling on them. A professionally-installed wall mount might be the best plan, but, if your new set will be standing on furniture, make sure to pick up some anchor straps. They’re an inexpensive way to prevent an unimaginable tragedy.
  •  If you’re picking up a tree to put those goodies under, keep a few things in mind. For natural trees, green is good. Not only will a fresher, greener tree look and smell nicer for longer, it will also be less of a fire risk. For artificial trees, look for “Fire Resistant” on the label. For either kind of tree, keep it away from heat sources.
  •  When you’re putting the lights up, check them for bare wires, loose connections, or cracked or broken sockets. If it’s time to replace them, look at the labels. Make sure they’re lab tested and make sure they’re certified for the use you’re planning: Outdoor displays need outdoor lights.
  •  Finally, if a power outage turns a bright holiday into a dark one, use care when you pick your solution. Keep candles away from flammable surfaces, and do not use a generator indoors. The carbon monoxide fumes can build up and suffocate quickly.

As much as CPSC, manufacturers, and retailers have worked , and continue to work, to make every product on the shelves as safe as it can be, there will always be some risks, and people will make some mistakes. We have put out a lot of new rules this year, and, while I haven’t agreed with all of them, I will always support the goal of making products safer. But safety is a joint effort shared by regulators and consumers. In many ways, you can do more to keep your family safe than my colleagues and I ever could, just by staying informed and making sound, responsible decisions.

The holiday season should be a time for family and fun, not emergency room visits or worse. A little information and a good dose of caution can help ensure your holiday is a safe and happy one.  Have a wonderful Thanksgiving and a safe and joyful holiday season!

Setting the Record Straight: the Crib Rule

The Chairman has recently made several pointedly hostile, but grossly inaccurate, statements that warrant correction. One of the most egregious is her accusation that with our new crib rule, I have sought to put the interest of “a few retailers” over the interests of children. What utter nonsense!

This agency has always viewed children as a special constituency and has a long history of working to assure a safe sleep environment for them. That work intensified in 2007 when, as acting chairman, I established a cross-cutting, multidisciplinary team to do a comprehensive look-back at incidents involving children’s sleep environment to better determine hazard patterns. In 2008, while I was still chairman, the agency issued an Advanced Notice of Proposed Rulemaking informing the public that we were developing a new mandatory crib standard and seeking information. We were doing this work at the same time that the American Society for Testing and Materials (ASTM) was working to develop its new voluntary crib standard, and CPSC staff joined in that effort as well. ASTM issued its standard in 2009, and that provided much of the basis for the 2010 CPSC mandatory standard. The agency proposed to adopt the ASTM standard with two changes in mid-2010 and finalized the mandatory standard in December, 2010, to go into effect 6 months later. All this work was done with the full support of all the Commissioners.

So where is the problem that the Chairman alludes to? While I support what is in the new crib standard, I am very troubled by the chaotic manner in which we implemented it. Because we did not do a cost-benefit analysis that looked at regulatory impacts and alternatives, we did not even know that this was a major rule – having an impact on the economy of over $100 million – until literally days before the Commission was about to vote on the final rule. (The crib rule is only the second major rule in the history of the agency.) Only at that point did it become apparent that this rule would do major damage to the child care industry, which would be required to replace every single crib in every single child care center in this country. The hotel industry also told us that they would have to stop making cribs available to guests because of this rule. In response, we delayed the effective date for these two industries for two years – a date that was arbitrarily chosen by the Commissioners with no data behind it. For everyone else, it would be illegal to make or sell a crib that did not comply with the new standard (even if that crib did meet the 2009 ASTM standard) after June 28, 2011.

During the spring of 2011, we began to hear rumblings of trouble with respect to this rule. CPSC began accrediting labs only in late spring because the labs were having trouble doing the tests we required. Supply issues were starting to pop up. Although the scant economic analysis we had done prior to issuing the rule told us that retailers would not be impacted by it, we started to hear from retailers that the assurances they had received from manufacturers about the availability of retrofit kits for current inventory were not being met. (By the way, CPSC rushed to put out its guidelines on accepting retrofit kits only 72 hours before the crib standard was to go into effect.) In the late spring, we did a “quick and dirty” survey of five retailers and found at least 100,000 non complying cribs in inventory. We then heard from an association representing smaller retailers requesting an additional three months before the crib standard went into effect for retailers. At the same time we heard from the leasing industry also asking for a delay in the effective date.

The reaction of the various Commissioners is instructive. Commissioner Northup and I believed that the modest additional time the small retailers requested was reasonable, if the cribs in inventory complied with the new 2009 standard and were not the drop-side cribs that had created much of the concern. Among other things, this short extension would allow for retailers to get the retrofit kits manufacturers had promised so that they did not have to “trash” perfectly good cribs. While the majority of my colleagues were fine with giving the leasing industry an 18-month extension, they refused to give a 90-day extension to small retailers. Apparently the majority thinks that children in child care, in hotels and in leased cribs (regardless of whether they are drop side cribs or what the crib’s condition of repair is) do not warrant the extra protection, but a short extension so that thousands of perfectly good cribs do not have to be destroyed is not warranted. That is reasoning that I do not agree with.

It is unfortunate that the Chairman believes that anyone who does not agree with her is automatically “anti-consumer.” It is unfortunate that the Chairman sees “obstructionism” when constructive dissenting views are offered. It is unfortunate that the Chairman selectively interprets both facts and words and unfairly impugns her colleagues. Mostly, it is unfortunate that the Chairman cannot work with us to fashion rules that protect American families without imposing job-killing requirements on those same American families.

Click here for more information on the Chairman’s false accusations.

A Conversation I Wish We Weren’t Having

When I started this blog, I wanted it to be an open conversation with consumers, companies and those who are impacted by what the CPSC does.  The feedback I have gotten has been very helpful in informing my thinking on the various issues we are called upon to address. 

Today a majority of commissioners decided to discount the concerns that a number of small retailers have raised about the effective date of our new crib standard.  I believe that the majority made the wrong decision.  I believe that a modest extension of the rule’s effective date will not impact safety but will help small retailers.  I want to share with you a note I received in response to this vote.  This note sums up the issue better than I ever could and makes fighting the good fight worth it.

Commissioner Nord, I just wanted to take a moment to thank you for your support of our family’s small business in this morning’s Commission meeting. The outcome is sad & will, without a doubt, have a significant impact on medium size specialty stores (with built up inventory) such as ourselves. It is a shame that one . . . competitor (in business 7 years & borrowing to buy cribs at all) was so vocally against helping other specialty retailers. We have been in business 40 years & pay upfront for all of our merchandise. I’m ashamed to be in the same market & category as this other retailer. Thank you for your efforts on our behalf. My family really does appreciate it. From the bottom of our hearts,

HOW MUCH TESTING IS TOO MUCH TESTING? Or, Button, Button, Who’s Got the Button? (and who tested the button? certified the button? materially changed the button? periodically tested the button? randomly sampled the button?)

Today the Commission is putting out for comment two proposed rules for doing the testing required by the CPSIA.   It is important that the basic rule be in place before the testing and certification stay of enforcement is lifted in February 2011.  Given the importance of this rule, we need to hear from the public about whether this proposal gets close to being right. 

This proposed rule, in an unprecedented way, puts federal regulators onto the factory floor.  The proposed rule is over 170 pages long and is by its nature very complex.  I am not confident we have written a rule that works for all the products under our jurisdiction.

One important aspect of the proposal deals with component testing and certification.  If suppliers of the paint or the resin or the buttons and zippers that go into a product are willing to test and certify for compliance, it is wasteful to also require the manufacturer who is using those components to repeat the testing.  This only makes sense.  However, if the components are going into children’s products, they need to be tested by a third party laboratory approved by the CPSC.  Further, the component maker is also responsible for doing periodic testing and for testing when a material change takes place, as is also required by the statute. 

We are hoping the component testing rule will result in the development of a market for third party tested components to especially help small businesses.  During my recent trip to China, I specifically asked various manufacturers whether component testing would address the concerns I was hearing about the immense costs of testing.  Several manufacturers told me they were already seeing tested components being advertised.  Others told me that for commodity type products, such as wire, it is unlikely such a market will develop.  I would be interested in your thoughts on how component testing will help you and what more we can do to develop this process.

In a statement I filed today, I lay out some of the serious concerns I have with the proposed rule.  This proposal will be open for comment for 75 days.  The text of the rule tells you the process for submitting comments.  I urge you to weigh in.  We need to hear from you before you’re told what testing you’ll have to do year after year, product after product.

Test the Testing?

Retailers play an important role in helping assure safety, especially under the CPSIA.  Unfortunately, the law’s provisions about retroactivity and general enforcement by state attorneys general, among others, have led many retailers to demand testing beyond what is required.

To help fix that, I have been pushing for a Commission statement to reinforce the fact that retailers may rely on the testing and certification done by their suppliers. 

How would this work? The CPSIA and its regulations require domestic manufacturers and importers of children’s products to have them: 1) tested by a third party testing laboratory approved by the CPSC; and 2) certify compliance with applicable safety regulations based on those tests.  Importers may rely on testing done by foreign manufacturers as long as that testing was done in an approved lab.

My proposal is an enforcement policy to make clear that  retailers may rely on certificates from suppliers and that they would not be subject to penalties for selling products that do not comply with our safety standards if they relied in good faith on those certificates.  Issue a false or misleading certificate or give us a reason to believe the retailer knew or should have known that the certificate was false, and we can come after you. Should the product violate an applicable safety standard, of course it could be recalled.

 Since I hope we can get this policy out next month, help us with your input:

  • If you are a supplier, has a retailer required you to do redundant or excessive testing, or has a retailer refused to accept your test results?
  • If you are a supplier, would such a statement be helpful?  If not, what actions could the Commission take that would be helpful?
  • If you are a retailer, would such a Commission statement be helpful?
  • If you are a supplier or a retailer, what should be in this policy?

Speak up and help write this policy. Thanks!

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